The Ftse Mib rose by 0.57% on Thursday, December 1, 2022, down 9.5% from the start of the year. Complex 2022, between the war in Ukraine, sanctions on Russia, hyperinflation and raising interest rates. The specter of a recession caused by rising energy costs coupled with continued monetary tightening is hovering like a gray cloud over the markets. Although today there are two good news that investors evaluate.
On the other hand, the speech of Fed Governor Jerome Powell, who used a more pessimistic tone in his speech on Wednesday evening. Investors now expect the interest rate to rise by 0.5% in December.
On the other hand, the Chinese government is slowing down its grip on lockdowns in the production region in the south of the country where one of the major technology companies, Foxconn, which produces most of Apple’s iPhones, is headquartered.
On the flip side, the macro data due on Thursday calls for caution. Manufacturing PMI in Italy It settled at 48.4 points in November, up from 46.5 points in October and the consensus forecast of 47.5 points, but still below the 50-point threshold that separates contraction from expansion. So how is the stock portfolio organized?
In the Monthly reports published today, Aquita sim It starts with Powell’s speech, noting that “the pause in rate hikes is approaching, but signs of an overall deterioration are growing.” Stock markets have posted a strong rebound since the beginning of October, analysts recall, with the global stock index up 15% and 8% in November (the decline is 14% since the start of the year), «above all, thanks to hopes for the central bank interest rate pivot. The Federal Reserve, in the wake of signs of weak inflation in the United States, which led to a decrease in the US real interest rates for 10 years by 20 basis points, to 1.48%, to maintain American productive activity ». Meanwhile, the investor situation remained very cautious.
Equita: Another 2-3 quarters of economic weakness
Milano Sim’s view is that weak global growth will continue for the next two to three quarters “with deteriorating macro indicators, tightening credit conditions, declining liquidity and the energy crisis in the European Union.”
Indeed, the messages from central banks confirm that the restrictive stance on monetary policies is far from over (Powell warned that the final rate could be higher than the 4.6% previously indicated by the Fed itself), “but the signs correspond to a pause in the rally cycle in The first half of 2023 with the consequent stabilization of financing costs, ”explains Iketa.
The basics still don’t help
After the recent recovery in the market, the investor situation is now “less extreme, and this calls for more caution in the short term in the absence of positive signs on the macro front, as analysts warn that risks” remain directed towards the discount. In general, if the minor on the one hand The expected pressure on interest rates is moving in the direction of stabilizing market multiples After the strong rating downgrade recorded since the beginning of the year, on the other hand, Equita believes that «Fundamentals are still poorly supportedwith poor visibility into the depth and duration of the ongoing economic slowdown.
So Sim confirms the neutral view on stock markets. In the recommended portfolio, investor weight increased slightly to 91.3% in December from 89.5% in the previous month compared to 90% neutral weight after the inclusion of Erg stock which has entered the FTSE Mib instead of Atlantia since November 29, thus exiting the FTSE Mid from the portfolio. Small businesses. The rotation was “partially funded by Inwit’s entry and reduced the weight of financial firms (Intesa Sanpaolo)”.
In terms of positioning, Equita continues to favor high-quality stocks over cyclical stocks, while maintaining a neutral position in the financials and slightly increasing utilities.
The portfolio includes 75% industrial stocks, 17% banking stocks and 8% insurance stocks. The growth in average earnings per share expected by 2022 for industrialists is 46%, for banks 12%, for insurance companies 14%. Finally, the expected price/earnings ratio for 2022 is 8.8 times in the case of the industrial sector, 7.8 times for banks, and 8.6 times for insurance companies. (All rights reserved)